Beginning in January 2014, the CFPB (Consumer Financial Protection Bureau) released guidelines for mortgage servicers to help protect out would be foreclosures.  The goal is to protect/prevent "unnecessary foreclosures" and to ensure fair treatment.

According to the new guidelines:

  • Mortgage servicers are prohibited from foreclosing on a home owner who is seeking loan modifications. Servicers will be unable to file a foreclosure notice until a home owner is at least 120 days behind on a mortgage payment.
  • A foreclosure sale on the home will be prohibited until alternatives are considered. Servicers will be required to give home owners adequate time to accept an alternative to foreclosure before going ahead with a foreclosure sale. Servicers must respond to loan modification requests from home owners who apply for a loan modification at least 37 days prior to a foreclosure auction.
  • When a home owner has missed two consecutive payments, servicers are required to send a written notice of foreclosure alternative examples to the home owner, such as deferred payments and loan modifications.
  • Servicers must be easily accessible to the home owners for assistance.
  • Servicers will be required to publish more clear mortgage statements, which includes mortgage payments broken down by principal, interest, fees, and escrow as well as includes the amount and due date of the next payment.
  • Servicers must notify home owners early about any interest rate changes to their mortgage payments.
  • Servicers will be required to credit a home owner’s account on the date a payment arrives.

Source is CNN Money 1/17/2013.

So what does this mean?  Well it might slow down the foreclosures.  There is no doubt that the number of foreclosures has hurt all of us.  When your home is well kept with a current mortgage is hurts when the house two doors down (similar in nature) sells for $30k less than yours.  Slowing down foreclosures and keeping home owners occupying there homes is a good long as we are not just building a house of cards...